Sir Terry Leahy: UK firms stop short after early successes

British businesses are pulling up short when they should be pressing on
overseas to further their successes, warned Sir Terry Leahy, the man who
turned around Tesco.

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Former CEO of Tesco Sir Terry Leahy is interviewed by the Daily Telegraph's head of Business, Damian Reece.Photo: Kevin Holt

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Sir Terry also spoke at length at the opportunities relating to the growing world of e-commerce, in which he believes the UK may be the most advanced market globally. It is easier to grow across borders online than offline, he added.Photo: Reuters

“Through history, the world’s great companies were mainly started in recessions,” he said. “If you look beneath the economic cycle will see trends, currents, in customer behaviour. If you can position your business to capture those fast currents, it will give you growth.”

Trends he identified as drivers for growth included health and beauty – “people want to look good and live forever” – anything that saves consumers time, and businesses which can offer customers simplicity, rather than just more choice.

“People want their problem solved in a satisfactory way, they don’t just want more choice, that can mean more problems,” he said.

Sir Terry also spoke at length at the opportunities relating to the growing world of e-commerce, in which he believes the UK may be the most advanced market globally. It is easier to grow across borders online than offline, he added.

“Businesses involved in e-commerce in the UK have great opportunities in Europe,” he said. “It’s online, it’s e-commerce, but it’s also the plumbing for that industry, it’s data businesses getting insight into customers. These are all really fast growing areas.”

Ultimately, for any business, sticking close to your customer and tracking their needs is where growth will come from, he argued.

He cited Tesco Express, the chain’s successful smaller high street format, which came about because customers – particularly young men – said they did not have time to go to the out-of-town superstores on which supermarkets relied at the time.

Sir Terry also said politicians can do more to support British business, urging the Government to support its talk with action, and ensure that business and wealth creation is “at the heart of society”.

“I think they know the right words, they know what they should do, but they don’t actually do it,” he said. “Regulations have been growing faster that the economy for years and years and years. Governments … have to trust their citizens more, they have to trust markets more.”

Meanwhile banks, he said, must "turn their face" back to business, citing the long-term relationships between German companies and their lenders as key to their success.